PM: 4 Points

Prime Minister Voreqe Bainimarama and the French Minister for Foreign Affairs and International Development, Jean-Yves Le Drian on the margins of the One Planet Summit in Paris, France, on December 12, 2017. Photo: DEPTFO

There is an urgent need to pool private and public finance towards addressing climate change as there is no Planet B.

COP23 President and Prime Minister Voreqe Bainimarama while speaking at the One Planet Summit in Paris highlighted four areas which needed to be focussed on as we continue the fight against climate change.

First – need for better access to the public finance that is being mobilised through the formal mechanisms of the United Nations Framework Convention on Climate Change, including the Green Climate Fund.

“The financial pledges made need to flow faster through a less bureaucratic and more streamlined system and make a real difference on the ground,” Mr Bainimarama said.

Second – must recognise the essential role of private finance and bring together both public and private climate finance.

“And they are all looking for opportunities to earn a return on these funds. We must unlock that finance for our common cause. We must encourage them to accelerate the trend towards investments that contribute to solving the climate crisis.”

While there has been encouraging progress to date, the private finance that has supported climate solutions has been largely at the project level, and not broader institutional investment.

“We need to think about how to build the new asset classes that institutional investors can invest in at scale.”

Third – public and private finance is moving away from fossil fuels towards climate-smart investment opportunities. This is an important trend and it is evolving very rapidly.

“We saw at COP23 the work of the Global Alliance to Power Past Coal.

“But we need to ensure that as the global financial community moves away from dirty investments, it has viable and scalable clean alternatives into which the money can flow.

“And these alternatives need to be robust and reflect the level of risk and expectation on future returns that the system demands.

“After all, when we talk about tapping into the vast amounts of institutional capital for climate solutions, we are largely talking about the retirement savings of ordinary, hardworking citizens. And we need to honour their expectation of being good stewards with their money.”

Fourth –governments and the private sector must work together like never before with a sense of urgency and caution to unlock the trillions of dollars of private sector capital that can be mobilised to solve this challenge.

The major financial markets of the world — New York, London, Paris, Berlin, Zurich, Tokyo, and others, have the capacity and all the players needed to direct more than enough capital towards this problem.

“The governments of the major economies of the world must act in concert with these markets to make it happen.”

For their part, these governments can create the regulatory environment and financial incentives for public and private capital to flow towards implementing climate solutions — and specifically towards implementing more ambitious country NDCs under the Paris Agreement.

“The major economy governments and large public institutions can also play a critical role in scaling up private sector climate finance by helping to reduce the risk of such investments.”